02 December 2024
Changing company culture, Leadership & Management, Training & Development
According to Gallup, only 2% of CHROs strongly agree that their performance management system inspires employees.
In this episode of Better from Great Place To Work, we delve into the intricacies of performance reviews and goal setting with Liz Heitner, chief human resources officer at Penn Mutual.
She shared how Penn Mutual has transformed its approach, resulting in a dynamic performance success program. They've shifting from annual reviews to continuous, real-time feedback that's connected to business goals. Leaders are aligned and employees are actively involved in the process.
She also encourages the use of AI tools like ChatGPT to boost productivity and innovation, while upholding ethical guidelines and transparency.
On why performance management often doesn’t work well:
One thing some programs get wrong is this focus on a bell curve that's predicated on the fact that you have low performance, that you’re hiring people that do not fit and will not be successful. That's actually a very small percentage of most populations of most organizations. The focus really needs to shift to empowerment, enablement, and people really bringing their best. It's not something that you can just say, "Oh, yay, we've arrived. Check the box. We're done."
This is how contemporary leaders, operating in these remote, high-performing organizations need to focus their time and energy. This is the J-O-B so to speak.
A lot of these performance management programs are a check-the-box compliance exercise, a tool for delivering merit and bonus — and not thought of as the fiber of how we work and accomplish results as a company.
On how Penn Mutual made changes:
We took a test and learn approach.
Step one was goal setting, and we did a lot of training and development to support this effort. People said, "I'm not really sure how my role relates to these areas of the business. I'm really only focused on this area." And so having those integrated conversations with leadership to ensure the goals made sense down to the individual level and cascaded down was huge. And you’ll learn what people shouldn't work on. “What are the things that we no longer are going to work on that don't align with the priorities?”
We also moved our performance calendar to align with our business cycle. And rather than it being an annual event — performance management, success, or feedback — it happens in real time and we’re normalizing that for employees.
And we looked at the alignment of rewards. If you get your performance review and your rating in June, you might ask, "How does that connect with my bonus that I get in the following February?" So again, making sure that we lined up performance elements and the reward cycle in the right place was something we got a lot of credibility around.
On the importance of aligning leaders:
You need to get everybody focused, committed, and on the same page around what you’re trying to accomplish with your performance management system. That has been a continued focus of our leadership development and training.
At our leadership summit for the top 150-200 leaders, we made sure that we're aligned and committed to the results and priorities as a company. That was a very impactful cultural catalyst, if you will.
On professional development programs:
Organizations need to spend some time reflecting on, "What are the skills, what are the capabilities, what are the competencies that we really need to be successful?" Not today, because today's baked, but five years from now, and, "How do we really chart that course?" That’s all aligned to your business goals. I would get aligned around those goals before you develop and deliver any learning and development activities. That’s so critical.
The other piece of this is thinking about how those programs will be received by employees. If the content is not engaging or relevant, and people don't understand the “why,” it leads to low participation and retention.
Make sure you engage your employees in the design process and explain to them why you're focused on the things you're focused on.
On expanding tuition reimbursement programs:
I think everyone is aware that degreed programs are less and less relevant to equipping current talent in the workforce with the skills they need for the future. We've heard the sound bites around the shrinking half-life of a skill, and it's interesting. There's so much to be gained by degreed programs, but there's so much value we can get out of certifications and courses so we shifted tuition reimbursement program to open it up for employees so they can build skills in the areas where they see fit, where they think they're going to get value.
On setting internal AI guidelines:
If your company doesn’t have an acceptable use policy that addresses AI – whatever your stance is – that is the first place you want to start. Get on the same page from a policy standpoint around what is acceptable and what isn’t within your environment.
We're taking a thoughtful look around the benefits and risks these tools can bring to our employees, policyholders, financial professionals and other stakeholders. Where I think we landed is that this technology has incredibly impactful possibilities for productivity. The toothpaste is out of the tube. It is not going away.
Also recognize that this technology is not something that we, as an employer, are procuring and providing, it's readily available on everyone's cellphones.
Show Transcript
Roula Amire:
Welcome to Better by Great Place To Work, the global authority on workplace culture. I'm your host, Roula Amire, content director at Great Place to Work. Performance reviews and goal setting isn't something many people enjoy, or think work well, so we brought on Liz Heitner: , chief human resources officer at Penn Mutual for help. She walks us through what changes they've made in this area and shares tips that you can apply to your business. We also talked AI, and if you don't have an acceptable use policy at your organization, this episode is your reminder to get it done. According to Liz, if you find yourself going down a wormhole on TikTok, it might be a good use of your time if you have the right algorithm.
Enjoy. Liz, welcome to the podcast.
Liz Heitner:
Thank you so much, Roula. It's great to be here.
Roula Amire:
So you have been in HR most of your career, if not all of your career?
Liz Heitner:
Yes, going on more years than I'd like to admit, but yes, I happened to be working at the time at Cornell University, and someone said, "Hey, why don't you go take a course in human resources? They've got a master's degree in it," and I did. I fell in love instantly, and the rest is kind of history.
Roula Amire:
Well, that's what I was going to ask, if it was something you always got into, if you're drawn to the field, so you already answered that. Liz, you became CHRO a few years ago for Penn Mutual in 2021, so congratulations on that achievement. I'm going to start us off today by reading a headline from Gallup, which says 2% of CHROs think their performance management system actually works, and one in five workers say they feel their performance reviews are fair, transparent, inspire better performance, so I think we can agree that's not encouraging to say the least. I first have to ask, before we get into what's happening at Gallup, does that surprise you?
Liz Heitner:
Not at all. Not at all. I think at different points in my career, I've been victim to those same performance management programs that we all hope we're not replicating.
Roula Amire:
So I think you've revamped your performance management system at Penn Mutual. You have check-ins and ongoing feedback, and I'll let you share what's changed. So I want to know, what's changed and why, and what has the result been?
Liz Heitner:
We asked our employees how this is working, and we're getting high marks, fortunately through our engagement surveys and some supplementary questions that we added to the Great Places to Work survey to ensure that what we're hoping to have as an impact from our Performance Success Program, and I'll go back to why we called it the Performance Success Program here in a moment, we're measuring the impact of this, and we're seeing the impact of this through other indicators. And I think that's also something that a lot of these performance management programs, it's very much so a check-the-box compliance exercise, a tool for delivering merit and bonus, those types of things, and it's really not thought of as the fiber of how we work and how we accomplish results as a company, and so I'll go back a little bit. How we got on this journey around performance success was we, first off, we went remote. Remote and we're still remote. And during this period of time, I think there was a bit of an epiphany, that we were having productivity was going through the roof, we were accomplishing some really big things as an organization, and it almost seemed as if ...
Well, it did seem as the organization was really humming and was really driving greater success, and something about remote work and leveraging maybe the collaboration tools that fortunately we had at our disposal, meetings got shorter, got more focused, and we got very focused around our priorities as a business, and what we were doing and what we were not doing. And all of this remote work goodness and the productivity gains really were the impetus for us to realize that it's not about FaceTime, it's not about everybody being in the same office and seeing people sitting in their chairs and doing work, it's about the impact that we have and our focus on achieving our business goals, and our team goals, and our individual goals, and so on. And so that was a really great place to start. We weren't trying to solve problems, we were trying to really build on some very positive momentum that we've had as a business. Accountability to business priorities was so huge here.
I've worked in a few other organizations before this and very large organizations that have GE on my resume, and certainly there's so many great fundamentals we can learn from those organizations that were really jet-setters in the space of performance management. But I think one thing where some of these programs got wrong was this focus on a bell curve, and this focus that's really predicated on the fact that we have low performance, that we're hiring people that do not fit and will not be successful. That's actually a very small percentage of most populations of most organizations, I'd argue. The focus really needs to shift to empowerment, enablement, and people really bringing their best. And I think when you have the alignment of things to our priorities as a business ...
And I'll share with you one other thing. We actually had a performance management cycle that didn't align to the business cycle. So that was a very easy change that we made to get that alignment and get that connection. And rather than it being an episodic annual event, performance management, or performance success, or performance feedback, all of that has to be happening real time, and our growing business and our increasingly fast-paced environment, normalizing that for employees, and employees recognizing, "This is to aid in my benefit" is really been fundamental, and we've seen great feedback on the process. We're seeing great results as a business in response to this, but it's an effort.
It's not something that you can just say, "Oh, yay, we've arrived. Check the box. We're done." This is really how contemporary leaders, operating in these remote, high-performing organizations need to be focusing their time and energy. This is the J-O-B so to speak.
I think that has also been a big area where we spend a lot of time on training and engagement for our leaders, and they're seeing the value of it. They're seeing the returns as well.
Roula Amire:
So let's get into some specifics on what has changed and advice for others. I heard you now have ongoing real-time feedback. It's like a change, and then the other significant change, it's now paired with business results and goals. What else has changed? What tips do you have for others, and why?
Liz Heitner:
Sure, and this is work. This is time and energy. We introduced back in 2002 though, fundamental to this was a goal-setting process. And this goal-setting process, we were really fortunate, we had great engagement. 90% of our organization participated in what we first made an optional process because we were curious to see what the uptake would be, and I think that's a good opportunity as well.
Maybe don't make things mandatory, maybe test and learn, and get the feedback is another approach when you're kind of thinking about perhaps a little bit more user-centric design of how you're developing your programs, but we took a test and learn approach. Step one was goal-setting, and we did a lot of training and development, really, to support this effort. What I would say is that it wasn't built in a day. It wasn't necessarily smooth. People said, "I'm not really sure how my role relates to these areas of the business. I'm really only focused on this area."
And so really having those integrated conversations then with leadership to ensure the goals made sense down to the individual level and cascaded down was really huge. You also learn a lot of things about what folks shouldn't work on, and so that has been a huge area of, I think really this year's focus, is talking about, "What are the things that we no longer are going to work on that don't align with the priorities?," so getting to that granule level. Moving our performance calendar to logically align with the business cycle, some people have an offset calendar year, fiscal year business cycle. We do not. We have a calendar year.
Just getting all of that lined up so things logically and temporally made sense was huge. And additionally, the alignment of rewards. If you get your performance review and your rating in June, "How does that connect with my bonus that I get in the following February?" So again, making sure that we lined up these performance elements and the reward cycle in the right place was something that I think we got a lot of credibility around. The principles of why we're doing this, that has to really be agreed upon.
And so aligning everyone to these principles has been a continued focus that we do through a lot of leadership development and training, as well as we recently had our first leadership summit for the top 200 leaders of the organization, or I guess it was in between 150 and 200 leaders of the organization, and the huge area of focus was making sure that we are aligned, we've defined, we've aligned, and we're committed to the results and the priorities as a company. And so that was a very, I guess you could say, impactful cultural catalyst, if you will, for the organization. So if you feel like you're not getting commitment to your performance management system from your leaders, you might want to try something very specific like that that gets everybody focused and on the same page around what it is we are really trying to accomplish.
Roula Amire:
If you can't do those things, you don't have buy-in from leadership or you're not at workplace. I think something I heard that anyone can take away is don't wait till the yearly review.
Liz Heitner:
Oh, gosh.
Roula Amire:
Anyone can give ongoing real-time feedback.
Liz Heitner:
You're exactly right. You don't need a tool for that. That's just conversations. That's managing your team. The annual conversation, there should be no surprises.
This should be the summary of conversations that managers have been having throughout the year, sharing feedback. So everyone at the end of the day is, it's more of a performance recap, if you will, and hopefully the conversation is then focused on looking forward, "What can we do to be even more successful in the future?"
Roula Amire:
I have to ask you about interns because the President and CEO, Dave O'Malley started as an intern in '96.
Liz Heitner:
Yes. Yes, he did.
Roula Amire:
Was named CO in 2021. So, I mean, that's a testament to how you develop talent. That happened through a six-month internship with, I believe Drexel University, a program that's still in place.
Liz Heitner:
A program that is still a great partner to Penn Mutual as well. So it's kind of an amazing story.
Roula Amire:
Like all culture work, I like bringing this up because it's not just nice to have these programs, they're good for business. Our data shows that employees, when they were given training and development opportunities, they were almost 80% more likely to say that they've been involved and had meaningful innovation opportunities. So I'm interested in hearing from you, "Why do companies miss the mark when it comes to professional development?," because it does lead to innovation, retention, those business outcomes, and can you share any tips for others on what works for you, what makes your programs effective? I know you're encouraging employees always to get certifications and lots of training and development. Why is it hard for companies, and any tips for others?
Liz Heitner:
Organizations really need to spend some time reflecting on, "What are the skills, what are the capabilities, what are the competencies that we really need to be successful?" Not today, because today's baked basically, but five years from now, and, "How do we really chart that course?" And, of course, all of this is really aligned to the business goals. So getting really crystal clear on business strategy and what the implications are and are not for that business strategy and those business goals, and having pretty specific conversations from a functional perspective, from a leadership perspective, I think that's just so incredibly important. So if you're not aligned with your leaders, you're not all on the same page with the business goals, I'd start there before I developed and delivered any learning and development activities because it's so critical.
And we just spent with my leadership team, our CEO Dave hosted everyone for a two-day leadership team meeting, where we spent a lot of time focused on just this, what's working, what's going well, what's not working, and why isn't it working? And that's a great place also to start if you need some fingerholds around where you might want to focus, is thinking about, "Gosh, of the initiatives that maybe weren't so hot, why did they fail?," and having a really open and honest conversation around that, and, "How could they have been maybe gone better?" Maybe they didn't fail, but things just weren't so smoothly. So I think having that curiosity and that intellectual honesty around those topics can give you some really great insights into where to focus on aligned business goals. I think the other piece of this is thinking about how this is going to be received by employees, making sure instructional design is engaging and relevant.
If the content is not engaging, if it's not relevant, if people don't understand the why, it leads to low participation and retention, and so making sure you've engaged your employees in the design process and explained to them why you're focused on the things you're focused on. And then, if there's lack of follow through, if you're teaching things to employees that managers don't have a common understanding and vernacular around, I think that's where things can fall apart. So again, these things take work, they take repetition, and it's huge. If you go to these extra efforts, you'll have a lot more effective of a program than otherwise. I think some other things that I would just say, we democratized access to programming and took a test-and-learn approach to understand where there was interest and asked a lot of feedback along the way on our programming.
We also identified that for leadership, specifically leaders in this organization, I'm not going to be able to address everyone, but that is the critical priority for us building leadership skills in a remote environment in order for us really to be successful. So what that meant was a leadership summit. What that meant was leadership onboarding training specifically. All of these things are complementary, all of these things reinforce the why, and all of them help cultivate in their own teams this continuous improvement mindset. Lastly, what I would say is we opened up our tuition reimbursement programs.
We had very traditional tuition reimbursement programs that reinforce for degreed programs. I think everyone is aware that degreed programs are less and less relevant to equipping current talent in the workforce with the skills they need for the future. We've heard the sound bites around the shrinking half-life of a skill, and it's interesting, there's so much to be gained by those degreed programs. I'm not knocking it, but there's so much value we can get out of certifications, and courses, and just in time learning. So we really shifted tuition reimbursement program to open it up for employees so they can build skills in the areas where they see fit, where they think they're going to get value, and that's been really interesting to see and to support as well. So all of these things, I think are really working virtuously for us to kind of shift into that growth mindset, that continuous improvement, continuous learning mindset.
Roula Amire:
That growth mindset is key because you're looking ahead. You're not focused on right now. You're down the road five to 10 years, developing leaders, co-creating the employee experience, upskilling equity of opportunity, creating an equitable workplace so you can thrive, and grow, and be agile, and innovative, all the things you need to do to remain competitive. One area is AI, and you are certainly leading in this area, which is great to see. You had an AI competition, where employees could experiment with GenAI and share how those tools help their day-to-day jobs. I'd like to hear how many employees participated, what you heard, and as always, any tips for others?
Liz Heitner:
The first thing that I would recommend to everyone is get on the same page around AI as a leadership team and what acceptable use is within your organization. And it can take on very different flavors in different organizations. There's different risks, and we've embraced, I think a little bit of a ball-rock-run approach to ensuring that we're staying mindful of these tools and recognizing this ChatGPT and generative AI are rapidly evolving and gaining adoption, and there's new use cases every day. So we're really taking a thoughtful look around the benefits and the risks these tools can bring to not only our employees, our policyholders, our financial professionals and other stakeholders. But that being said, what I will say is this is one of these areas that when you look at the use cases, and what we've established is some guardrails.
So if your company does not have an acceptable use policy that addresses AI, whatever your stance is, I would say that is absolutely the first place you want to start, is get on the same page from a policy standpoint around what is acceptable and what is not within your environment. And it should not be the same for every organization, but where I think we landed is that this technology has incredibly impactful possibilities for productivity. The toothpaste is out of the tube. It is not going away. Also recognizing that this technology is not something that we, as an employer, are procuring and providing, it's readily available on everyone's cellphones.
So making sure that people understand that for idea generation and supportive concepts, this is a fantastic tool for research. This is a fantastic tool to summarize text, and if you have a huge paper and you upload it, a huge article that, "Gosh, I don't want to read all 20 pages of this. What are the key elements I need to understand?" So powerful. But obviously, things like PII data, company confidential data, those types of things, those are things where we've said, "Absolutely not. You should not be using these tools for this."
But I did run a contest and I said, "Share with me one way that you leverage ChatGPT or another one of these generative AI tools to save time and improve your work or personal life. You can copy each other. I don't care. I just want to hear how you used it, and I want to hear what you thought, and those types of things. It was so fun because we got great ideas around creating interview guides, creating communications.
I know one of the first ways I used it was writing a letter to my HOA, requesting to change the color of my house. It was fun just to hear all of these different applications, and then refine, "Gosh, how do you use this as a meaningful tool going forward?" Verbatim responses and understanding even tone, great tool for understanding and analyzing tone sentiment, helping you go through feedback data and summarizing the analysis, helping you come up with training materials. And so it's something that with my own HR team, we are continuing to not only want to focus on this for our own function, but encouraging leaders and employees like, "Wow, have you thought about maybe leveraging ChatGPT to get a first draft of that?," "Oh, that sounds like a really cool project. I wonder if you put that into ChatGPT using the RISEN model," which is something I learned about on TikTok, right?
But some great ideas out there. If you use the RISEN model, what will come back? So this is one of those incredibly exciting and powerful tools that I think they'll continue to be innovation around, so people can leverage it and use it differently. As a mother of a high-schooler, I know that our kids are learning how to use it very well and very productively, but there's the guideposts, right? There's the ethical concerns, there's the ensuring we're not plagiarizing, we're crediting appropriate ideas and thought leaders for their ideas and their IP, but I think that's going to be the only way we're going to figure out how to solve those things, is by leaning in and working together and having the discussions around how to do this right, how to do this effectively, and ensuring that at the end of the day, we're not losing our human perspective. Our human judgment on what is right, I think, is also really huge here.
Roula Amire:
And for companies listening, I think your level of transparency and engagement with your employees is necessary to get people on board and earn their trust, and so co-creating, involving them, creating guideposts is refreshing, because again, you're testing and learning, and the only way to learn is to do it and see what works. Hey, everyone, if you like listening to the podcast, then don't miss the Great Place to Work for All Summit in April in Las Vegas. Well, you will learn from the best in the world, meet more than 1,500 leaders, and get insights on what the data says drives business success, and that's people and culture. I promise, you'll leave inspired and ready to transform your workplace. Register today.
Use the code BETTER to save $200 off registration. Link and code are in the episode bio. Don't miss out, and I'll see you there. If you could go back in time, what advice would you give your younger self?
Liz Heitner:
I do a lot of reflection on this. I think most of the people I know have had some form or degree of imposter syndrome at a different point in their career, and I think the thing I would say is you don't have to be all things to everyone. Know your strengths, and also know the things you're not great at, but really focusing on those strengths and don't expect yourself to know everything. Everyone else doesn't expect you to know everything. I think as HR leaders, our ability to ask questions, be approachable, put the mousse on the table is an expression I use, but make sure we're talking about what the real issues are.
I think that's the value that I bring, my creativity, my emotional connection, my connection to driving change in the strategy. I will never be a financial wizard and be asked to be a CFO of a company. And I think at one point, maybe I thought I really needed to have all the numbers memorized and everything else. No. You need to have a great team that you can rely on to be the best at your function and driving the strategy you have, and work closely with your partners in tandem.
But I think that's the advice I would give for myself, is you really don't have to be perfect at everything and focus on those strengths.
Roula Amire:
Is there a book or podcast you would recommend to your peers?
Liz Heitner:
We had Adam Grant join us for our annual employee meeting last year. I'm a huge Adam Grant fan as a thought leader. I love the memes he posts, I love the research he comes out with, and as a proponent for a flexible work environment, he definitely speaks to my heart on a number of areas. In terms of others, it was funny. I was joking with a person on my team as I was looking at this question.
I get a lot of my professional content, and I guess you could say HR related content and AI tips and tricks from TikTok. I know that's controversial for some, but I love the short format. I love having the little snippets of knowledge. If you don't want to do TikTok, YouTube is fantastic, but just get your algorithm going, start researching the topics that are interesting to you, and you can go down the wormhole, so to speak, on a lot of topics, and find really fascinating, great tips and tricks you can apply instantly.
Roula Amire:
We have heard Adam Grant before, but we haven't heard TikTok, so great tip, Liz. How do you create a sense of well-being for yourself?
Liz Heitner:
Oh, gosh. So having a flexible work environment, and I think it's important our leaders role-model this. It's something that, as a working wife ... I'm a mom of two teenagers. I can't believe I have two teenagers at this point.
I think as I've matured, I really realized that I can only bring my best self to work. I can only role-model the values of the organization that we're espousing around flexibility and work-life balance if I'm actually doing that. So I block time in my calendar for things that fill my cup from an energy perspective, and I block time in my calendar for when I just need to catch up on things. I love being outside, so I spend a lot of time playing tennis, walking outside in my neighborhood or at the beach. That's something that fills my cup from an energy perspective.
I also recognize that sometimes I just need an escape from the meetings and I need quiet time that I've scheduled on my calendar just to thoughtfully catch up on whatever it is or have some of that mine time. I think that's really important that we're also sharing with employees that we do this, so they're just not going from the back-to-back meetings or answering email, we need time to think and time to be productive. And then just lastly, I've hit the middle age years, and sleep is such a precious commodity to me, and I think we all don't realize how sleep is just kind of fundamental to our mental health, our well-being in all those areas. So perhaps I was a little late to the game and recognizing that I actually do require a regular amount of sleep every night, but it's something that I definitely value and prioritize now, and plan for. You got to plan your day, you got to manage your time, you got to manage your calendar. It won't happen for me, at least, unless I actually am very thoughtful and intentional around how I'm managing my time.
Roula Amire:
I agree with what you're saying, modeling behavior, saying it's okay to block out time, take time for yourself, especially from leaders like yourself is so important. Well, Liz, thank you for joining. Thanks for sharing all your tips and insights. I know our listeners will take a lot away from our conversation today.
Liz Heitner:
I really enjoyed our time today, and I'm just so grateful for all of the great work that Great Places to Work leads for all of our organizations. It makes my job a lot easier to have your thought leadership in this space.
Roula Amire:
Thank you. You did great. Yay. Thanks for listening. If you enjoyed today's podcast, please leave a five-star rating, write a review, and subscribe so you don't miss an episode. You can stream this in previous episodes wherever podcasts are available.
Welcome to Better by Great Place To Work, the global authority on workplace culture. I'm your host, Roula Amire, content director at Great Place to Work. Performance reviews and goal setting isn't something many people enjoy, or think work well, so we brought on Liz Heitner: , chief human resources officer at Penn Mutual for help. She walks us through what changes they've made in this area and shares tips that you can apply to your business. We also talked AI, and if you don't have an acceptable use policy at your organization, this episode is your reminder to get it done. According to Liz, if you find yourself going down a wormhole on TikTok, it might be a good use of your time if you have the right algorithm.
Enjoy. Liz, welcome to the podcast.
Liz Heitner:
Thank you so much, Roula. It's great to be here.
Roula Amire:
So you have been in HR most of your career, if not all of your career?
Liz Heitner:
Yes, going on more years than I'd like to admit, but yes, I happened to be working at the time at Cornell University, and someone said, "Hey, why don't you go take a course in human resources? They've got a master's degree in it," and I did. I fell in love instantly, and the rest is kind of history.
Roula Amire:
Well, that's what I was going to ask, if it was something you always got into, if you're drawn to the field, so you already answered that. Liz, you became CHRO a few years ago for Penn Mutual in 2021, so congratulations on that achievement. I'm going to start us off today by reading a headline from Gallup, which says 2% of CHROs think their performance management system actually works, and one in five workers say they feel their performance reviews are fair, transparent, inspire better performance, so I think we can agree that's not encouraging to say the least. I first have to ask, before we get into what's happening at Gallup, does that surprise you?
Liz Heitner:
Not at all. Not at all. I think at different points in my career, I've been victim to those same performance management programs that we all hope we're not replicating.
Roula Amire:
So I think you've revamped your performance management system at Penn Mutual. You have check-ins and ongoing feedback, and I'll let you share what's changed. So I want to know, what's changed and why, and what has the result been?
Liz Heitner:
We asked our employees how this is working, and we're getting high marks, fortunately through our engagement surveys and some supplementary questions that we added to the Great Places to Work survey to ensure that what we're hoping to have as an impact from our Performance Success Program, and I'll go back to why we called it the Performance Success Program here in a moment, we're measuring the impact of this, and we're seeing the impact of this through other indicators. And I think that's also something that a lot of these performance management programs, it's very much so a check-the-box compliance exercise, a tool for delivering merit and bonus, those types of things, and it's really not thought of as the fiber of how we work and how we accomplish results as a company, and so I'll go back a little bit. How we got on this journey around performance success was we, first off, we went remote. Remote and we're still remote. And during this period of time, I think there was a bit of an epiphany, that we were having productivity was going through the roof, we were accomplishing some really big things as an organization, and it almost seemed as if ...
Well, it did seem as the organization was really humming and was really driving greater success, and something about remote work and leveraging maybe the collaboration tools that fortunately we had at our disposal, meetings got shorter, got more focused, and we got very focused around our priorities as a business, and what we were doing and what we were not doing. And all of this remote work goodness and the productivity gains really were the impetus for us to realize that it's not about FaceTime, it's not about everybody being in the same office and seeing people sitting in their chairs and doing work, it's about the impact that we have and our focus on achieving our business goals, and our team goals, and our individual goals, and so on. And so that was a really great place to start. We weren't trying to solve problems, we were trying to really build on some very positive momentum that we've had as a business. Accountability to business priorities was so huge here.
I've worked in a few other organizations before this and very large organizations that have GE on my resume, and certainly there's so many great fundamentals we can learn from those organizations that were really jet-setters in the space of performance management. But I think one thing where some of these programs got wrong was this focus on a bell curve, and this focus that's really predicated on the fact that we have low performance, that we're hiring people that do not fit and will not be successful. That's actually a very small percentage of most populations of most organizations, I'd argue. The focus really needs to shift to empowerment, enablement, and people really bringing their best. And I think when you have the alignment of things to our priorities as a business ...
And I'll share with you one other thing. We actually had a performance management cycle that didn't align to the business cycle. So that was a very easy change that we made to get that alignment and get that connection. And rather than it being an episodic annual event, performance management, or performance success, or performance feedback, all of that has to be happening real time, and our growing business and our increasingly fast-paced environment, normalizing that for employees, and employees recognizing, "This is to aid in my benefit" is really been fundamental, and we've seen great feedback on the process. We're seeing great results as a business in response to this, but it's an effort.
It's not something that you can just say, "Oh, yay, we've arrived. Check the box. We're done." This is really how contemporary leaders, operating in these remote, high-performing organizations need to be focusing their time and energy. This is the J-O-B so to speak.
I think that has also been a big area where we spend a lot of time on training and engagement for our leaders, and they're seeing the value of it. They're seeing the returns as well.
Roula Amire:
So let's get into some specifics on what has changed and advice for others. I heard you now have ongoing real-time feedback. It's like a change, and then the other significant change, it's now paired with business results and goals. What else has changed? What tips do you have for others, and why?
Liz Heitner:
Sure, and this is work. This is time and energy. We introduced back in 2002 though, fundamental to this was a goal-setting process. And this goal-setting process, we were really fortunate, we had great engagement. 90% of our organization participated in what we first made an optional process because we were curious to see what the uptake would be, and I think that's a good opportunity as well.
Maybe don't make things mandatory, maybe test and learn, and get the feedback is another approach when you're kind of thinking about perhaps a little bit more user-centric design of how you're developing your programs, but we took a test and learn approach. Step one was goal-setting, and we did a lot of training and development, really, to support this effort. What I would say is that it wasn't built in a day. It wasn't necessarily smooth. People said, "I'm not really sure how my role relates to these areas of the business. I'm really only focused on this area."
And so really having those integrated conversations then with leadership to ensure the goals made sense down to the individual level and cascaded down was really huge. You also learn a lot of things about what folks shouldn't work on, and so that has been a huge area of, I think really this year's focus, is talking about, "What are the things that we no longer are going to work on that don't align with the priorities?," so getting to that granule level. Moving our performance calendar to logically align with the business cycle, some people have an offset calendar year, fiscal year business cycle. We do not. We have a calendar year.
Just getting all of that lined up so things logically and temporally made sense was huge. And additionally, the alignment of rewards. If you get your performance review and your rating in June, "How does that connect with my bonus that I get in the following February?" So again, making sure that we lined up these performance elements and the reward cycle in the right place was something that I think we got a lot of credibility around. The principles of why we're doing this, that has to really be agreed upon.
And so aligning everyone to these principles has been a continued focus that we do through a lot of leadership development and training, as well as we recently had our first leadership summit for the top 200 leaders of the organization, or I guess it was in between 150 and 200 leaders of the organization, and the huge area of focus was making sure that we are aligned, we've defined, we've aligned, and we're committed to the results and the priorities as a company. And so that was a very, I guess you could say, impactful cultural catalyst, if you will, for the organization. So if you feel like you're not getting commitment to your performance management system from your leaders, you might want to try something very specific like that that gets everybody focused and on the same page around what it is we are really trying to accomplish.
Roula Amire:
If you can't do those things, you don't have buy-in from leadership or you're not at workplace. I think something I heard that anyone can take away is don't wait till the yearly review.
Liz Heitner:
Oh, gosh.
Roula Amire:
Anyone can give ongoing real-time feedback.
Liz Heitner:
You're exactly right. You don't need a tool for that. That's just conversations. That's managing your team. The annual conversation, there should be no surprises.
This should be the summary of conversations that managers have been having throughout the year, sharing feedback. So everyone at the end of the day is, it's more of a performance recap, if you will, and hopefully the conversation is then focused on looking forward, "What can we do to be even more successful in the future?"
Roula Amire:
I have to ask you about interns because the President and CEO, Dave O'Malley started as an intern in '96.
Liz Heitner:
Yes. Yes, he did.
Roula Amire:
Was named CO in 2021. So, I mean, that's a testament to how you develop talent. That happened through a six-month internship with, I believe Drexel University, a program that's still in place.
Liz Heitner:
A program that is still a great partner to Penn Mutual as well. So it's kind of an amazing story.
Roula Amire:
Like all culture work, I like bringing this up because it's not just nice to have these programs, they're good for business. Our data shows that employees, when they were given training and development opportunities, they were almost 80% more likely to say that they've been involved and had meaningful innovation opportunities. So I'm interested in hearing from you, "Why do companies miss the mark when it comes to professional development?," because it does lead to innovation, retention, those business outcomes, and can you share any tips for others on what works for you, what makes your programs effective? I know you're encouraging employees always to get certifications and lots of training and development. Why is it hard for companies, and any tips for others?
Liz Heitner:
Organizations really need to spend some time reflecting on, "What are the skills, what are the capabilities, what are the competencies that we really need to be successful?" Not today, because today's baked basically, but five years from now, and, "How do we really chart that course?" And, of course, all of this is really aligned to the business goals. So getting really crystal clear on business strategy and what the implications are and are not for that business strategy and those business goals, and having pretty specific conversations from a functional perspective, from a leadership perspective, I think that's just so incredibly important. So if you're not aligned with your leaders, you're not all on the same page with the business goals, I'd start there before I developed and delivered any learning and development activities because it's so critical.
And we just spent with my leadership team, our CEO Dave hosted everyone for a two-day leadership team meeting, where we spent a lot of time focused on just this, what's working, what's going well, what's not working, and why isn't it working? And that's a great place also to start if you need some fingerholds around where you might want to focus, is thinking about, "Gosh, of the initiatives that maybe weren't so hot, why did they fail?," and having a really open and honest conversation around that, and, "How could they have been maybe gone better?" Maybe they didn't fail, but things just weren't so smoothly. So I think having that curiosity and that intellectual honesty around those topics can give you some really great insights into where to focus on aligned business goals. I think the other piece of this is thinking about how this is going to be received by employees, making sure instructional design is engaging and relevant.
If the content is not engaging, if it's not relevant, if people don't understand the why, it leads to low participation and retention, and so making sure you've engaged your employees in the design process and explained to them why you're focused on the things you're focused on. And then, if there's lack of follow through, if you're teaching things to employees that managers don't have a common understanding and vernacular around, I think that's where things can fall apart. So again, these things take work, they take repetition, and it's huge. If you go to these extra efforts, you'll have a lot more effective of a program than otherwise. I think some other things that I would just say, we democratized access to programming and took a test-and-learn approach to understand where there was interest and asked a lot of feedback along the way on our programming.
We also identified that for leadership, specifically leaders in this organization, I'm not going to be able to address everyone, but that is the critical priority for us building leadership skills in a remote environment in order for us really to be successful. So what that meant was a leadership summit. What that meant was leadership onboarding training specifically. All of these things are complementary, all of these things reinforce the why, and all of them help cultivate in their own teams this continuous improvement mindset. Lastly, what I would say is we opened up our tuition reimbursement programs.
We had very traditional tuition reimbursement programs that reinforce for degreed programs. I think everyone is aware that degreed programs are less and less relevant to equipping current talent in the workforce with the skills they need for the future. We've heard the sound bites around the shrinking half-life of a skill, and it's interesting, there's so much to be gained by those degreed programs. I'm not knocking it, but there's so much value we can get out of certifications, and courses, and just in time learning. So we really shifted tuition reimbursement program to open it up for employees so they can build skills in the areas where they see fit, where they think they're going to get value, and that's been really interesting to see and to support as well. So all of these things, I think are really working virtuously for us to kind of shift into that growth mindset, that continuous improvement, continuous learning mindset.
Roula Amire:
That growth mindset is key because you're looking ahead. You're not focused on right now. You're down the road five to 10 years, developing leaders, co-creating the employee experience, upskilling equity of opportunity, creating an equitable workplace so you can thrive, and grow, and be agile, and innovative, all the things you need to do to remain competitive. One area is AI, and you are certainly leading in this area, which is great to see. You had an AI competition, where employees could experiment with GenAI and share how those tools help their day-to-day jobs. I'd like to hear how many employees participated, what you heard, and as always, any tips for others?
Liz Heitner:
The first thing that I would recommend to everyone is get on the same page around AI as a leadership team and what acceptable use is within your organization. And it can take on very different flavors in different organizations. There's different risks, and we've embraced, I think a little bit of a ball-rock-run approach to ensuring that we're staying mindful of these tools and recognizing this ChatGPT and generative AI are rapidly evolving and gaining adoption, and there's new use cases every day. So we're really taking a thoughtful look around the benefits and the risks these tools can bring to not only our employees, our policyholders, our financial professionals and other stakeholders. But that being said, what I will say is this is one of these areas that when you look at the use cases, and what we've established is some guardrails.
So if your company does not have an acceptable use policy that addresses AI, whatever your stance is, I would say that is absolutely the first place you want to start, is get on the same page from a policy standpoint around what is acceptable and what is not within your environment. And it should not be the same for every organization, but where I think we landed is that this technology has incredibly impactful possibilities for productivity. The toothpaste is out of the tube. It is not going away. Also recognizing that this technology is not something that we, as an employer, are procuring and providing, it's readily available on everyone's cellphones.
So making sure that people understand that for idea generation and supportive concepts, this is a fantastic tool for research. This is a fantastic tool to summarize text, and if you have a huge paper and you upload it, a huge article that, "Gosh, I don't want to read all 20 pages of this. What are the key elements I need to understand?" So powerful. But obviously, things like PII data, company confidential data, those types of things, those are things where we've said, "Absolutely not. You should not be using these tools for this."
But I did run a contest and I said, "Share with me one way that you leverage ChatGPT or another one of these generative AI tools to save time and improve your work or personal life. You can copy each other. I don't care. I just want to hear how you used it, and I want to hear what you thought, and those types of things. It was so fun because we got great ideas around creating interview guides, creating communications.
I know one of the first ways I used it was writing a letter to my HOA, requesting to change the color of my house. It was fun just to hear all of these different applications, and then refine, "Gosh, how do you use this as a meaningful tool going forward?" Verbatim responses and understanding even tone, great tool for understanding and analyzing tone sentiment, helping you go through feedback data and summarizing the analysis, helping you come up with training materials. And so it's something that with my own HR team, we are continuing to not only want to focus on this for our own function, but encouraging leaders and employees like, "Wow, have you thought about maybe leveraging ChatGPT to get a first draft of that?," "Oh, that sounds like a really cool project. I wonder if you put that into ChatGPT using the RISEN model," which is something I learned about on TikTok, right?
But some great ideas out there. If you use the RISEN model, what will come back? So this is one of those incredibly exciting and powerful tools that I think they'll continue to be innovation around, so people can leverage it and use it differently. As a mother of a high-schooler, I know that our kids are learning how to use it very well and very productively, but there's the guideposts, right? There's the ethical concerns, there's the ensuring we're not plagiarizing, we're crediting appropriate ideas and thought leaders for their ideas and their IP, but I think that's going to be the only way we're going to figure out how to solve those things, is by leaning in and working together and having the discussions around how to do this right, how to do this effectively, and ensuring that at the end of the day, we're not losing our human perspective. Our human judgment on what is right, I think, is also really huge here.
Roula Amire:
And for companies listening, I think your level of transparency and engagement with your employees is necessary to get people on board and earn their trust, and so co-creating, involving them, creating guideposts is refreshing, because again, you're testing and learning, and the only way to learn is to do it and see what works. Hey, everyone, if you like listening to the podcast, then don't miss the Great Place to Work for All Summit in April in Las Vegas. Well, you will learn from the best in the world, meet more than 1,500 leaders, and get insights on what the data says drives business success, and that's people and culture. I promise, you'll leave inspired and ready to transform your workplace. Register today.
Use the code BETTER to save $200 off registration. Link and code are in the episode bio. Don't miss out, and I'll see you there. If you could go back in time, what advice would you give your younger self?
Liz Heitner:
I do a lot of reflection on this. I think most of the people I know have had some form or degree of imposter syndrome at a different point in their career, and I think the thing I would say is you don't have to be all things to everyone. Know your strengths, and also know the things you're not great at, but really focusing on those strengths and don't expect yourself to know everything. Everyone else doesn't expect you to know everything. I think as HR leaders, our ability to ask questions, be approachable, put the mousse on the table is an expression I use, but make sure we're talking about what the real issues are.
I think that's the value that I bring, my creativity, my emotional connection, my connection to driving change in the strategy. I will never be a financial wizard and be asked to be a CFO of a company. And I think at one point, maybe I thought I really needed to have all the numbers memorized and everything else. No. You need to have a great team that you can rely on to be the best at your function and driving the strategy you have, and work closely with your partners in tandem.
But I think that's the advice I would give for myself, is you really don't have to be perfect at everything and focus on those strengths.
Roula Amire:
Is there a book or podcast you would recommend to your peers?
Liz Heitner:
We had Adam Grant join us for our annual employee meeting last year. I'm a huge Adam Grant fan as a thought leader. I love the memes he posts, I love the research he comes out with, and as a proponent for a flexible work environment, he definitely speaks to my heart on a number of areas. In terms of others, it was funny. I was joking with a person on my team as I was looking at this question.
I get a lot of my professional content, and I guess you could say HR related content and AI tips and tricks from TikTok. I know that's controversial for some, but I love the short format. I love having the little snippets of knowledge. If you don't want to do TikTok, YouTube is fantastic, but just get your algorithm going, start researching the topics that are interesting to you, and you can go down the wormhole, so to speak, on a lot of topics, and find really fascinating, great tips and tricks you can apply instantly.
Roula Amire:
We have heard Adam Grant before, but we haven't heard TikTok, so great tip, Liz. How do you create a sense of well-being for yourself?
Liz Heitner:
Oh, gosh. So having a flexible work environment, and I think it's important our leaders role-model this. It's something that, as a working wife ... I'm a mom of two teenagers. I can't believe I have two teenagers at this point.
I think as I've matured, I really realized that I can only bring my best self to work. I can only role-model the values of the organization that we're espousing around flexibility and work-life balance if I'm actually doing that. So I block time in my calendar for things that fill my cup from an energy perspective, and I block time in my calendar for when I just need to catch up on things. I love being outside, so I spend a lot of time playing tennis, walking outside in my neighborhood or at the beach. That's something that fills my cup from an energy perspective.
I also recognize that sometimes I just need an escape from the meetings and I need quiet time that I've scheduled on my calendar just to thoughtfully catch up on whatever it is or have some of that mine time. I think that's really important that we're also sharing with employees that we do this, so they're just not going from the back-to-back meetings or answering email, we need time to think and time to be productive. And then just lastly, I've hit the middle age years, and sleep is such a precious commodity to me, and I think we all don't realize how sleep is just kind of fundamental to our mental health, our well-being in all those areas. So perhaps I was a little late to the game and recognizing that I actually do require a regular amount of sleep every night, but it's something that I definitely value and prioritize now, and plan for. You got to plan your day, you got to manage your time, you got to manage your calendar. It won't happen for me, at least, unless I actually am very thoughtful and intentional around how I'm managing my time.
Roula Amire:
I agree with what you're saying, modeling behavior, saying it's okay to block out time, take time for yourself, especially from leaders like yourself is so important. Well, Liz, thank you for joining. Thanks for sharing all your tips and insights. I know our listeners will take a lot away from our conversation today.
Liz Heitner:
I really enjoyed our time today, and I'm just so grateful for all of the great work that Great Places to Work leads for all of our organizations. It makes my job a lot easier to have your thought leadership in this space.
Roula Amire:
Thank you. You did great. Yay. Thanks for listening. If you enjoyed today's podcast, please leave a five-star rating, write a review, and subscribe so you don't miss an episode. You can stream this in previous episodes wherever podcasts are available.
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